Exclusion and Limiting Terms

1114 words (4 pages) Essay in Contract Law

02/02/18 Contract Law Reference this

Last modified: 02/02/18 Author: Law student

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The is a question about terms of contract specifically about exclusion and limiting terms and in particular about terms on docket.

The complication often occurs when a defendant tries to limit his obligation to the plaintiff. To overcome this obstruction, court determines the legal rights and liabilities so that there is no loss to either party. Moreover express terms are not necessary to be referred or discussed to parties when entering into a contract. In that condition, exclusion clause is used. Exclusion clause refers to terms of contract that attempts to  limit the liability of a defendant from that of plaintiff in the issue that defendant causes loss to the plaintiff (Vermeesch & Lindgren,2005 and Study Guide,2009). In many cases, terms of exclusion clauses are apparent at premises or on dockets or tickets. A detailed inspection of terms involves the condition under which contract is form and then its accurate legal effect.

There are several principles which determine when a person is bound by an exclusion clause. Person who signs the document containing exclusion clause will be confined by it, even if he has not read it. There will also be bondage to exclusion clause if there is an unsigned document delivered and the person knows about it. However it will not be applied if it would have been reasonable to assume that document was no more than delivery receipt (Vermeesch & Lindgren,2005). It is explained in case related to Causer v Browne [1952] VLR1 in which a docket was handed over when a frock was left for dry cleaning, which had a condition printed on it which stated that “no responsibility is accepted for loss or injury to articles through any cause whatsoever.” When the frock was returned it was stained, and court refuse to treat document as contractual on the ground that docket handed might reasonably be considered as receipt when collecting items. (Vermeesch & Lindgren,2005). Similarly in this case Rappiddeo Dry Cleaners gave Bill a docket when he left his dinner suit and his wife’s silk dress for dry cleaning. It was imprinted on the receipt that they are not liable for any damage or loss to clothing left for cleaning.

Likewise, there should be sound considerations in bringing exclusion clause in notice to other party. If it comes in notice after the contract has been signed it will be considered as ineffectual. In the case of Olley v Malborough Court Ltd [1949] 1 KB 532, where Olley booked into a hotel and after entering into room found a notice on wall that ‘proprietors will not hold themselves responsible for articles lost or stolen unless handed to the manageress for safe custody.’ Olley’s furs were stolen because of negligence of hotel staff and she won as contract had been made before plaintiff went to her room (Vermeesch & Lindgren,2005). Similarly Rappiddeo Dry Cleaners had a signage board which refers that they will not be liable for any loss or damage made to clothes left for dry cleaning. But Bill was not informed about that before receiving the printed docket. Hence Dry cleaners are liable to compensate Bill for the damages and loss done to their clothes.

Also Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 explains that mere display of notice at bailee’s premises is not sufficient, the bailor must have agreed to the term becoming part of the bailment agreement or must be taken to have done so (Vermeesch & Lindgren,2005, p 726, 23.18). By having a close look on all the cases discussed and as it appears in this case Bill is entitled for compensation from Rappiddeo Dry Cleaners. For the reason that confirms that no explanation was given to plaintiff prior in making contract i.e. taking the docket regarding the terms and conditions. Secondly it may be considered merely as pick up slip, thirdly the sign board was not perceived by the plaintiff as it was at back of the shop.

Also the interpretation of such clauses was considered by the High Court in joint judgment in Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 68 ALR 385. (Vermeesch & Lindgren,2005, p 166, para 7.47).

It wouldn’t make any difference if Bill had noticed the clause on the docket and assistant had said:” that excludes liability for damages to buttons and zippers” as for in determining whether an exclusion clause protects a defendant from liability to a plaintiff, the court is responsible for determining the intention of the parties and considering clear statement of exclusion clause. Exclusion clause should be construed according to its ordinary meaning thereby explaining the context in which clause appears. Secondly, Contra Proferentum rule will be implied in case of ambiguity so that it can be construed against the party relying on its protection. Also if the defendant’s act that causes loss to the plaintiff is an act that is not allowed by the contract then an exclusion clause cannot defend the defendant from liability of damages as described in Sydney City Council v West (1965) 114 CLR 353 (Study Guide, 2009). Besides that if previous dealings were made still a person will consider docket to be a receipt and not a contractual agreement.

Consequently Bill can claim the compensation for stained dress and lost suit as it is a damage made for which Dry cleaners are liable. Damage is defined as a sum of money paid in compensation for loss or injury. It can be claimed if plaintiff proves the breach of contract made, breach is caused by the loss in respect to damages are sought or all the steps are taken to mitigate the loss. This rule is stated in the case of Hadley v Baxendale [1854] 156 ER 145 which establishes general and consequential damages. It also explains that liability exists for all damages occurring naturally or was reasonably supposed to have been speculated by the parties as consequence of breach (Vermeesch & Lindgren,2005, p 322, para 16.10 and Study Guide, 2009).

There can be conditions in which court may simply issue an order so that party refrain from doing something that breaches the contract. Therefore, bill has consent to seek for damages made by Rappiddeo Dry cleaners but as he was familiar that his wife’s dress was a family heirloom and he hired the dinner suit at substantial expense, he didn’t tried to mitigate or extenuate the loss. Also Bill didn’t informed the Dry cleaners the importance of heritage dress and expenses incurred in hiring dinner suit so he cannot claim for the emotional distress and significant expense caused by it.

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